Canada’s housing market remained stuck in neutral in February

Canada’s housing market remained quiet in February 2026, with national home sales slipping 1.3% month over month, according to the Canadian Real Estate Association (CREA). The slowdown follows a weak January and suggests that buyers are still moving cautiously, even as borrowing conditions continue to improve.

CREA noted that activity began to pick up toward the end of the month, hinting that demand may be starting to build ahead of the spring market. Still, February’s weakness shows many buyers, especially first-time buyers, are continuing to wait on the sidelines for a clearer bottom in mortgage rates and home prices. That hesitation appears to be most visible in Ontario and British Columbia, where affordability challenges remain more pronounced.

At the same time, sellers also pulled back. New listings fell 3.9% month over month, reversing January’s surge and keeping overall market activity muted heading into spring.

The national market tightened slightly, but remains balanced

With new listings falling more rapidly than sales in February, Canada’s sales-to-new listings ratio tightened to 47.6%, up from 46.4% in January. That suggests the market became slightly less advantageous to buyers compared to the start of the year, even though sales activity remained subdued overall.

The long-term national average for the sales-to-new listings ratio is 54.8%; readings between 45% and 65% are generally considered consistent with balanced market conditions. February’s reading keeps the national housing market near the lower end of that range.

In other words, conditions have not shifted firmly in favour of sellers, but the market is no longer loosening at the pace seen in January. With both buyers and sellers still showing restraint, February’s data points to a market that is stable, but hesitant.

Inventory holds steady, though regional differences remain wide

There were 151,850 properties listed for sale across Canadian MLS® Systems at the end of February, up 3.7% from a year ago. That said, inventory was still 12.3% below the long-term average for this time of year, showing that while supply has improved, it remains somewhat tighter than normal historically. 

Nationally, there were five months of inventory at the end of February, unchanged from January and exactly in line with the long-term average. On paper, that suggests a balanced market. However, CREA cautioned that the national figure hides major regional variation. No province is currently sitting exactly at the five-month mark, and only a small number of local markets are close to it. 

Home prices continue to edge lower in February

Home prices also moved lower again in February, though the pace of decline was less severe than in January. The National Composite MLS® Home Price Index (HPI) fell 0.6% month over month, following a larger 0.9% decline at the start of the year. On a year-over-year basis, the price was down 4.8%, pointing to continued price softness across parts of the country. The largest downward pressure continues to come from Ontario, British Columbia, and Alberta, where benchmark prices remain below year-ago levels. Those declines were partly offset by price growth in other provinces.

Meanwhile, the non-seasonally adjusted national average home price came in at $663,828 in February, almost unchanged from a year earlier, down just 0.2%.

What this means for Canada’s housing market in 2026

For buyers, February’s data points to a market that is still offering some breathing room. Home sales remain subdued, prices continue to edge lower, and inventory is sitting at a level that suggests more balanced conditions nationally. That means buyers are not facing the kind of intense competition that defined past spring markets, particularly in softer regions where sellers may need to be more flexible on price.

At the same time, many would-be buyers are still waiting on the sidelines for more certainty. Some are looking for mortgage rates to fall a bit further, while others want clearer signs that home prices, especially in Ontario and B.C., have stabilized. With spring typically being the busiest season for real estate, the coming months will be an important test of whether that cautious demand finally starts to turn into sales.

Also Read:

• GTA housing market tightens in February
• Lower home prices improved affordability in 12 of 13 Canadian cities in January
• 2026 Canada First-Time Home Buyer's Guide